Gold fund manager 'fully invested'; inflation, geopolitical risks to remain

The gold market is experiencing a crosswind of economic forces, but the main tailwinds of inflation and geopolitical risks are still intact, said Sean Fieler, CIO of Equinox Partners.

“I don’t think the Republicans are going to be aggressively in the business of cutting spending, they weren’t under the Trump Administration, I think it’s going to be hard to position themselves that way in a Biden Administration. On the other reason they would put through tax increases. With the Fed monetizing the deficits no matter how large they are, why Republicans would go along with tax increases, is difficult to fathom for me,” he said.

Geopolitical risks are expected to remain high during a Biden Administration, Fieler said.

“I think we’ll see that a Biden Administration will be significantly more hawkish than what we saw from the Trump Administration,” he said.

On inflation, the Federal Reserve’s underestimating rising prices is a mistake, Fieler said.

“They’re just not that concerned about inflation and they are very concerned about unemployment,” he said.

 

By David Lin

For Kitco News

Kinesis Money

David

Miners are taking advantage of higher gold price, more projects kicking off in Q4 – Metso Outotec

Mining companies are taking advantage of higher gold prices this year, especially when it comes to silver and gold projects, according to Metso Outotec.

More new projects are starting to take off in Q4, Metso Outotec's President of North and Central America Giuseppe Campanelli and VP of metals sales for North and Central America Tim Robinson told Kitco News.

"Our customers, especially on the gold and silver side, are looking to ramp up as fast as they can. They want to take advantage of the fact that gold prices are high. Maybe smaller projects are faster to execute and get into operation. That seems to be a little bit of a trend," Campanelli said.

Throughout the COVID-19 crisis, miners have managed to maintain production level while following through on new social distancing measures.

"Our customers are doing a fantastic job of managing COVID as best they can, maintaining production levels, trying to ensure that their operations are ongoing by social distancing, and securing their supply chain," Campanelli said. "They're turning profit and I think we have a very strong role to play to help them."

The coronavirus crisis has created a lot of uncertainty globally, Campanelli stated, adding that precious metals prices have benefited greatly from that uncertainty.

"Gold is a hedge against uncertainty. So gold prices skyrocketed, silver prices as well. The precious metals are benefiting from that quite heavily," he said. "But we're also seeing lofty commodity prices for base metals. Copper prices are fairly strong as well as iron ore. This is great for our customers and we have been supporting them as they ramp up production to take advantage of the spike. There are many interesting projects on the go at the moment."

Initially, COVID has triggered a delay in financing but the actual work has never stopped, Robinson highlighted.

"COVID did affect some of the gold projects with regards to financing, where the banks couldn't visit the sites however, this did not stop the preparation work for these projects," he said. "It did delay projects being executed this year but we are seeing some movement in Q4 and that's all really positive and bodes well for 2021.

Social distancing and remote monitoring

Social distancing was one new major change that needed to be introduced at mine sites this year, which has successfully been implemented, Campanelli said.

"Our customers are limiting heavily who can go to site. They're trying to social distance and run their operations," he noted. "That changed significantly how we interact with our customer. We've moved through virtual communication. There's only so much you can do virtually. They still have a need for our services and people are going there to help them, but it's limited and on the need-to-go basis."

Digital solutions and remote monitoring have become very popular this year, helping the mining industry deal with the current coronavirus situation, Campanelli pointed out.

"We've been further developing our virtual communication channels to perform remote inspections and support them remotely. We have remote monitoring centers that we call Performance Centers, in Santiago, Chile and Changsha, China," he said.

This was already a trend already pre-COVID, Campanelli added. "It's becoming increasingly difficult for our customers to operate their sites. As ore grades decline, mines are more remote and are deeper in the ground … Our equipment is digitalized meaning, we can extract information on equipment and process performance."

The data received is then used to project what's going to happen next and advise what adjustments could be made.

Outlook on mining

The outlook for the mining industry remains positive going forward, especially when it comes to gold and precious metals throughout North and Central America, Robinson added.

"We're quite busy with the initial phases of projects, in particular, gold projects. In terms of that, they haven't stopped, they're preparing for execution. That's really positive," he described.

On the base-metal side of things, there were more delays this year because base metals projects have larger scale and larger capital because of the tonnage that goes through the plant, Robinson pointed out.

"It's a little bit different on the base metals side," he said. "The capital that's required for some of the larger base metals projects is more significant than gold. The difference between this year and the years before is that we've seen good prices on gold and good prices on copper and everybody's excited about that, but it's delayed decision-making."

Going forward, gold does not need to maintain its new highs in order for most of the projects to make money, Robinson said. "Gold projects haven't been based on $1,900 per ounce gold. They've been justified on earlier prices. We are confident on these projects being executed net year," he noted.

There is also a lot of innovation happening in the mining space. Robinson highlighted energy comminution technology, tailings management, EV battery material processing technology, sustainable metals recycling and BIOX technologies.

"BIOX technologies, for example, is biological leaching of refractory oars. It's been around for some time, but not necessarily in this region. We've got operations using this technology in Africa, in Australia, and in central Asia. But there's a lot of interest in the technology in North America," Robinson said.

Merger news

According to its website: "Metso Outotec is a frontrunner in sustainable technologies, end-to-end solutions and services for the minerals processing, aggregates, metals refining and recycling industries globally."

This summer, Metso and Outotec completed their merger, which has created "a truly end-to-end portfolio of solutions covering a more significant part of the customer's flow sheet," said Campanelli.

The merger has also allowed Metso Outotec to take on more complex challenges and more risks.

"Now, we have the ability to deliver a much larger scope. We can be more responsible for what's being fed into the equipment and how it's processed later on," Campanelli described. "From the services side … we take on more of the responsibility and really help our customers optimize their plants, optimize their downtime, and the reliability of their equipment."

 

By Anna Golubova

For Kitco News

 

Kinesis Money

David

A 'sober' 2021 gold price target; say goodbye to 'phenomenal' drivers – HSBC's Jim Steel

2020 has seen a “phenomenal” inflow of gold-backed exchange-traded funds, fueling an investment-led rally, but while ETF inflows are still expected to be strong, 2020’s level of inflows would be hard to keep up.

Jim Steel, chief precious metals analyst at HSBC, said that gold will average a price of $1,965 an ounce in 2021, owing to competing macroeconomic forces; accommodative monetary policy will continue to provide tailwinds, but an unwinding of geopolitical risk from a Biden Administration will ease the appetite for gold.

“Gold is sensitive to geopolitical risk,” he said. “If we’re going to get some rapprochement on the trade issues between the United States and the other countries, and it’s not just one country, it could be from several, and we also get a charm offensive from the Biden Administration to U.S. allies or to others, and the geopolitical risks come down and there’s progress made on the trade front, then that would be negative for gold.”

Steel stressed that the forecast of $1,965 an ounce is an average price target, not a year-end target.

“We’re looking for strength in the more early part of the year and maybe more moderation in the second part, but don’t forget that’s an average, which means that the market will likely spend time about $2,000 for some time, and some time under $1,900,” he said.

The gold market’s rally this year has benefited from the global phenomenon of monetary stimulus and low interest rates.

“Most gold rallies are supported by two features: debt and liquidity and some varying degrees of one, the other, or both. Right now, the gold market is the beneficiary, and has been for quite some time, of both debt and liquidity, and by that I mean we’ve had highly accommodative monetary policies going on for a very long time,” Steel said.

Importantly, low interest rates raises the attractiveness of gold as an asset as it reduces the opportunity cost of holding it, Steel noted.

Seasonality is less important of a factor for the gold price as it used to be, Steel said.

“We used to get movements near Diwali, the Festival of Light in India, and also the Chinese New Year, and you do get some stocking up beforehand, but it’s not nearly as influential as it used to be,” he said.
 

By David Lin

For Kitco News

Kinesis Money

David

These industries to skyrocket in growth from ‘boost in new policies’

The future lies in clean energy and clean transportation, and technology companies surrounding those themes will benefit investors, said Howard Marks, CEO of StartEngine, an equity crowdfunding platform.

“Entrepreneurship is still a very good area for investment, anything to do with technology. I think green technology, which includes solar energy, renewable energy, electric cars, are going to take a big boost from the new policies of the Administration,” Marks said.

While the pandemic has harmed the small-business landscape of the economy, large tech companies have been propelled by the work from home culture.

“The pandemic, in many ways, has accelerated the future, and that acceleration was shown in those stocks, and those of course are the big, large-cap technology stocks,” Marks said.

There has been a record number of new business applications in the U.S., according to data from the U.S. Census Bureau.

“I think a lot of people lost their jobs in the beginning in the pandemic. I think there was a trend to lay off a lot of people, especially from big business, and also from small companies like restaurants. This generated an opportunity for people who are at home to say, should I pursue my dreams today,” Marks said.

Raising capital remains the primary challenge for entrepreneurs.

“Until the Jobs Act, which came out in 2012, entrepreneurs went to venture capitalists, angels, wealthy investors to receive capital, and sometimes friends and family…that was the status quo. With the Jobs Act [came] a new idea of equity crowdfunding where you can actually raise capital directly from a platform like StartEngine, and that is a brand new way, an alternative way to raise capital,” he said.

Marks noted that some of some of the most popular startups today are food and beverages, such as distilleries and breweries, followed by green technology, artificial intelligence, and fintech.

 

By David Lin

For Kitco News

Kinesis Money

David

Gold’s Momentous Rally From 2000 Compared To SPY & QQQ – Part I

We have illustrated the longer-term cycle patterns that originated from an anchor point in 2000 and the real appreciation in Gold compared to other assets.

Chris Vermeulen

Chris Vermeulen

12 hours ago (Nov 13, 2020 05:34 PM GMT)

Gold

My research team and I went off on a wild tangent trying to identify how the markets could react to the recent spike in price activity on Monday, November 9, 2020. This is the day that Pfizer announced a 90% effective rate with its new COVID-19 vaccine, causing the US stock market to skyrocket higher before the opening bell in New York. As with most pop-and-drops, this incredible upside spike trailed lower for the remainder of the trading day. My research team was curious if this type of setup presented any real future outcome or trends. To this end, we focused on the QQQ and the SPY in relationship to Gold.

9 to 9.5 year Gold Depreciation Cycle Ended in 2018 – what’s next?

Gold has been and continues to be a store of value for many around the world. At some times in history, Gold becomes undervalued in comparison to other assets (like stocks, real estate, and other tangible assets). At other times, Gold becomes more highly valued in comparison to other assets. This cycle has taken place throughout hundreds of years of history, and is rooted in the changing perceptions of market participants regarding “what/where is true value in the markets”.

When other assets are skyrocketing higher, Gold is out of favor in terms of real demand. It may still be moving higher in value, but as long as other assets seem to be increasing in value faster than Gold, demand for Gold will diminish. When most other assets enter a time of great concern or devaluation, Gold and Precious Metals usually begin to see stronger demand as the ratio between Gold prices and more traditional investment assets may be near extremes.

Many precious metals investors rely on the Gold to Silver ratio to measure how fast or slow Gold is appreciating or depreciating compared to Silver. This ratio can often be used to help pinpoint disparities between real price valuation levels. In our example, today, we’re using the ratio of the QQQ and SPY to Gold, which asseses more traditional investment asset values in comparison to Gold.

The first Monthly QQQ 2000 Anchor to Gold chart, below, attempts to highlight the past and current ratio levels based on an anchor price level starting on January 1, 2000. The purpose of this ratio chart is to understand how the price advance in the QQQ over time relates to the price advance in Gold. The higher the BLUE ratio level, the more valued QQQ is compared to Gold.

The first thing that caught our attention was the very high valuation levels in early 2000. This suggests that Gold was completely ignored in the late stages of the DOT COM rally when technology and other assets were flying high. As the DOT COM bubble burst, one would expect the ratio to decline over time. However, in this case, the ratio continued to decline over a 9 to 9.5 year period – reaching a low point in 2009 (the Global Financial Crisis lows). This downward trend in the QQQ to Gold 2000 anchor ratio suggests that while the QQQ rotated up and down in a broad sideways trend, Gold continued to appreciate in value. Throughout this time, from 2000 to 2009, Gold rallied over 215% (from $289.50 to over $931.00). This appreciation in Gold translated into the declines in the QQQ to Gold ratio on this chart above.

It was only after 2013 that the QQQ to Gold 2000 anchor chart began to rise again. Interestingly, this really began to take place after the 2011 peak in Gold prices (near $1923.70) and after the US economy really began a more organic growth phase prompted by multiple US Fed QE efforts. We can see from the chart below that the current peak levels (near 0.60) on this ratio chart are still well below the 1.60 ratio levels from 2000. Although this may appear to be a weaker ratio trend, remember this chart anchors everything to January 1, 2000 price points. So this chart reflects the QQQ to Gold ratio based on the origination ratio that existed on January 1, 2000.

COMPARISON OF QQQ, SPY AGAINST GOLD

This next ratio chart below shows the incredible rally in Gold compared to the QQQ and the SPY since the 2000 anchor point. It is important to understand that these ratios are based on the January 1, 2000 anchor price level and represent the comparative price appreciation/depreciation of these assets from that anchor point.

You can see that the QQQ and SPY were both well under the 1.0 ratio level for much of 2001 through 2013. This suggests that these assets failed to rally above the 2000 anchor price level throughout this time. Gold also experienced a brief decline in price below the 1.0 level in early 2000 through 2003, but it quickly started rallying after that point and has continued to extend higher recently.

When we compare the chart below to the one above, we can see that the rally in gold has extended quite a bit further than the rally in the QQQ and the SPY since 2000. Yet, this brings up an interesting question related to the cycles our research team has identified. Have we reached a peak level in the QQQ and SPY in relationship to the appreciation of Gold? Are we entering a new cycle where Gold will continue to appreciate higher compared to the QQQ and the SPY – attempting to recreate a nromalized ratio?

If our research team’s interpretation of this data is correct, the rally in Gold since the 2000 anchor point suggests a new momentum base has established in Gold after the 2011 peak price levels. This new momentum base, if our cycle research is accurate, suggests a broad market peak in equity/stock assets is setting up another 9 to 9.5 year precious metals appreciation cycle that started near 2019. This could be an incredible opportunity for skilled technical traders over the next 8+ years if we understand what to expect based on these cycles/trends.

In this first part of our two-part Gold series this weekend, we have illustrated the longer-term cycle patterns that originated from an anchor point in 2000 and the real appreciation in Gold compared to other assets. In Part II, we will share incredible new information that suggests we are near another 2000-like peak in equities/stocks, suggesting another broad metals rally is just starting and may last another 8+ years.

This does not mean that stocks will collapse or some external event won’t destroy the stock market valuations or the thesis presented. We are merely suggesting that Metals have established a base level (near 2015) while traders have focused on the equities/stocks recently and ignored metals. This rally in stocks/equities suggests that metals have under-appreciated compared to stocks/equities. This disparity in price valuations also suggests that either metals will rally to attempt to close the price disparity or that equities will decline or trade sideways while metals attempt to close the gap.

Overall, this is an incredible longer-term cycle setup that traders must keep in focus over the next few years. If this type of cycle repeats like it did after 2000, then Gold may be trading above $5500 per ounce within the next 2 to 3 years and may peak at levels above $10,000 before the peak is reached.

Learn how my team and I can help you find and execute better trades. We can help grow your trading account with our Swing Trading service, and also protect your investment account with our long-term market signals service. Visit www.TheTechnicalTraders.com today to earn more. If you trade options or are looking to learn more about options trading then please click here to sign up for information on the upcoming launch of our new options courses and our new options signals newsletter service.

For a look at all of today’s economic events, check out our economic calendar.

Chris Vermeulen

Chief Market Strategist

Kinesis Money

David

Gold holds steady as virus wave offsets vaccine hopes

Nov 13 (Reuters) – Gold prices were little changed on Friday, as fears of an economic impact due to a surge in global cases of COVID-19 countered optimism from the developments in a potential vaccine.

FUNDAMENTALS

* Spot gold was steady at $1,876.92 per ounce by 0044 GMT. It was headed for its worst weekly performance since late-September, declining 3.8% so far.

* U.S. gold futures were up 0.1% at $1,874.50.

* The dollar index held steady but was on track for a 0.7% weekly gain.

* The heads of the Federal Reserve and the European Central Bank welcomed the encouraging results in trials of a vaccine candidate for COVID-19 but stressed that the economic outlook will remain uncertain.

* The number of Americans filing new claims for unemployment benefits fell to a seven-month low last week, but the pace of decline has slowed and further improvement could be limited by higher infections and lack of additional fiscal stimulus.

* Top Democrats in U.S. Congress urged renewed negotiations over a multitrillion-dollar coronavirus aid proposal, but a top Republican immediately rejected their approach as too expensive.

* European officials warned against COVID-19 complacency and said measures to control a surge in infections must continue.

* More than a dozen U.S. states have doubled their COVID-19 case loads in the last 14 days, compared with the previous two-week period, while the global tally has crossed 52.45 million.

* The London Bullion Market Association is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.

* Silver rose 0.1% to $24.26 per ounce. Platinum was steady at $879.26, while palladium was 0.2% higher at $2,334.99.

DATA/EVENTS (GMT) 1000 EU GDP Flash Estimate QQ, YY Q3 1500 US U Mich Sentiment Prelim Nov

(Reporting by Eileen Soreng in Bengaluru; editing by Uttaresh.V)

8780, Outside U.S. +91 80 6749 6131; Reuters Messaging: eileen.soreng.thomsonreuters.com@reuter

Nov 13 (Reuters) – Gold prices were little changed on Friday, as fears of an economic impact due to a surge in global cases of COVID-19 countered optimism from the developments in a potential vaccine.

Spot gold was steady at $1,876.92 per ounce by 0044 GMT. It was headed for its worst weekly performance since late-September, declining 3.8% so far.

U.S. gold futures were up 0.1% at $1,874.50.

The dollar index held steady but was on track for a 0.7% weekly gain.

The heads of the Federal Reserve and the European Central Bank welcomed the encouraging results in trials of a vaccine candidate for COVID-19 but stressed that the economic outlook will remain uncertain.

The London Bullion Market Association is threatening to stop bullion from countries including the United Arab Emirates entering the mainstream market if they fail to meet regulatory standards, a letter seen by Reuters showed.

Silver rose 0.1% to $24.26 per ounce. Platinum was steady at $879.26, while palladium was 0.2% higher at $2,334.99.

(Reporting by Eileen Soreng in Bengaluru; editing by Uttaresh.V) </p> 8780, Outside U.S. +91 80 6749 6131; Reuters Messaging: eileen.soreng.thomsonreuters.com@reuters.net))

 

Kinesis Money

David

Gold continues to drift lower, as traders favor risk-on assets and dollar strength

Gold futures continued to drift lower, continuing the sharp decline that traders witnessed on Monday of this week. Although yesterday gold was able to recover slightly gaining $18 off of Monday sharp selloff, today traders took gold pricing back to erase those advances made on Tuesday. As of 4:55 PM EST, the most active December contract is currently fixed at $1863.50 which is a net decline of $12.90 on the day. Considering that gold futures opened at $1956 on Monday, the cumulative damage over the last three days have been almost $100 decline per ounce.

A combination of strong U.S. equities (risk-on) performance, dollar strength, and modestly higher bond yields have all dampened the bullish market sentiment in the precious metals. Ever since the first week of August when gold futures reached a new record high price at $2088, gold prices have been steadily forming a series of lower highs and occasional lower lows.

The only upside spike since the record high was reached occurred on Monday, November 9, when market forces took gold futures briefly above $1960 per ounce. That price could not be sustained even for a day as market participants aggressively sold gold and silver after Pfizer pharmaceutical announced that they had completed their stage III trials with a 90% efficacy rate.

The announcement took gold $110 lower from the highs achieved to close near the absolute bottom of the range at $1854. The last time gold closed at that particular price point ($1854) occurred on the week of September 5, 2011. Gold it hit its former record high of $1920 roughly 2 weeks before that. The similarity is eerily foreboding to recent action.

Our technical studies indicate that there is strong support for gold at the 38.2% Fibonacci retracement level which occurs at $1844. This retracement uses a data set that begins in the middle of March when gold traded to a low of $1415 up to the new record high which occurred during the first week of August at $2088. Our technical studies also indicate that there is a decent probability that the lows of $1850 will hold and continue to be a major support. However, a break below that price point could take gold to as low as $1768 per ounce which is the 50% retracement from the same data set.

Major resistance continues to be found at the 23.6% retracement level which occurs at $1937. With minor resistance at the 50-day moving average at $1913 and the 100-day moving average which occurs at $1906.

Until some news emerges that clarifies when and how much Fiscal stimulus will be allocated, we could see gold trade in a range between the support and resistance level mentioned above.
 

Wishing you as always, good trading,
 

By Gary Wagner

Contributing to kitco.com

Kinesis Money

David

Economy to shut down again this winter, says Lobo Tiggre, investor who called gold price drop

"If Biden is sworn in, he'll shut the economy down this winter more than Trump would have. USD goes under the bus, stagflation is likely. They'll blame COVID-19, but for once, socialism might also get some of the blame for the trouble it causes…" said Lobo Tiggre of the Independent Speculator in a Tweet made last week.

Several countries in Europe are already going back into national lockdown, and Tiggre said that like last time, the U.S. is likely to follow Europe’s lead.

“That’s what happened last time too. It started first in Europe, and then it came to the U.S. There might be political will in the U.S. to be more resistant to it,” he said.

Tiggre added that shutdowns are likely to happen under either Joe Biden or Donald Trump, but Biden’s policies are stricter.

“[Biden] gave a speech about what he was going to do about COVID-19 and he talked about national shutdowns, national mask mandates,” he said. “On the national level he could order federal employees to do things that would make non-compliance with his national mandate or national plan very difficult for local communities, even strongly Republican ones.”

Pfizer’s announcement this week that the company has produced a vaccine that’s 90% effective is unlikely going to prevent lockdowns.

“It’s a vaccine that needs to be kept at minus 80 degrees, needs two doses, isn’t going to be ready in mass numbers until next summer, and winter is coming,” he said.

On gold, Tiggre said that unless the economy avoids shutdowns completely, monetary and fiscal stimulus reverse course and interest rates rise, then it is unlikely that the yellow metal will face serious headwinds soon.

 

By David Lin

For Kitco News

Kinesis Money

David

"I would be surprised if we don’t sell off" – Gareth Soloway shorts stock market

Nothing has fundamentally changed in the economy to warrant a sustained rally in the stock markets, said Gareth Soloway, chief market strategist at InTheMoneyStocks.com, speaking with Kitco News at 3:45 pm EST on Monday.

“I don’t believe anything major has changed. We knew a vaccine was going to come, the projections are still first quarter, early second quarter,” he said. “The same thing with Biden coming into the White House, it doesn’t change a lot of the economics of the market, so it does concern me and I used it to put on shorts today.”

The Dow Jones rallied 800 points in the biggest single day gain in 5 months on Monday following Pfizer's announcement that their COVID-19 vaccine is 90% effective.

Soloway added that while retail traders reacted positively to the news on market open and have been the primary group driving prices higher, institutional investors have been using the opportunity to unload positions and take profits.

“Any time we have a gap up, it’s the institutions gapping that market up. So what’s going on is the small investor got very excited since the open, the Robinghood traders, etc., but the institutions have been selling into it,” he said.

Soloway took profits this morning on big moves in stocks like JP Morgan.

“Any time you get an extended move like this where you’re so short-term overbought, and I’m just talking about the last week and it has been a massive move, you have to think like a shorter trader, because in my mind I’m always thinking to myself, give me a pullback and I’ll re-buy, but I always like to pocket those profits,” he said.

On gold, Soloway said that long-term, the metal can hit $3,000 an ounce in two years’ time.

 

By David Lin

For Kitco News

 

Kinesis Money

David

Gold price holding gains after last week’s breakout

he gold market is starting the week on solid footing with modest gains following last week's nearly 4% rally.

December gold futures last traded at $1,955.40 an ounce, up 0.19% on the day.

Gold's humble gains after the market's Sunday evening open comes as Democratic nominee Joe Biden continues to secure his place as President-elect. Although some states haven't released their official tally from last week's election, Biden has secured enough votes to win the race to the White House, according to media reports.

Although Biden continues to solidify his place in history, garnering the most votes for any U.S. president, many political pundits said the next few weeks will be filled with uncertainty as President Donald Trump is not expected to give up without a fight. He has already initiated lawsuits in various states in an attempt to shift the results.

According to many commodity analysts, two factors will continue to support gold prices. First, a Biden presidency — even with a divided Congress as Republicans look to control the Senate and Democrats hold on to the House — is expected to lead to more stimulus measures. The second factor is that the ongoing political turmoil will boost gold's safe-haven demand.

Both of those factors will also continue to weigh on the U.S. dollar as it hovers near a two-month low. Analysts have said that the U.S. dollar will be essential to gold's future path, higher or lower.

"With recounts and lawsuits, we could be months away from finding out who will be the next president. That I think will weigh on the dollar. Because there is so much uncertainty in the U.S., I think you have to be in gold," said Darin Newsom, president of Darin Newsom

Aside from politics, many analysts also expect economic uncertainty to weigh on the dollar and provide renewed support for gold. This past week has seen new records in COVD-19 infections in the U.S. more than 10 million people across the country have been infected, and health officials said that it will only worsen.

Many analysts and economists said that the pandemic will weigh on economic growth heading into the new year.

Ole Hansen said that with the expected political gridlock on Capitol Hill, markets will start to look to the Fed for more leadership on the economy.

"Any new stimulus measures from the Fed is going to drive gold prices higher," he said. "This seems like the catalyst that could push gold prices to $2,000 an ounce by the end of the year.

Not only do analysts see strong fundamental support for gold, but the market made significant technical moves as prices hold near a six-week high.

Marc Chandler, managing director at Bannockburn Global Forex, said that gold broke above a significant downtrend line; however, he added that gold push back to all-time highs remains allusive.

"[Gold is] not quite off-to-the-races and a rechallenge of $2000. First, it must overcome the $1962 area, which is the halfway mark of the decline from the early August record high and then the (61.8%) retracement near $1989.

Analysts at Murenbeeld & Associates said that the lack of a blue wave in the U.S. election has shifted some bullish expectations for gold prices heading into the new year.

"The election results are not yet set in bedrock, but as it stands, we expect a smaller fiscal package to come than some (possibly even the Fed) had hoped, and we expect increased pressure on the Fed to review further monetary options in the event the economy sputters," the analysts said in the firm's weekly report.

The firm said that it sees gold prices ending the year between $1,960 and $1,980 an ounce.

 

By Neils Christensen

For Kitco News

 

Kinesis Money

David